QUANTITATIVE ANALYSIS OF DATA

RESEARCH CONCEPTS AND

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Meaning of Univariate, Bivariate &

Multivariate Analysis of Data
 Univariate Analysis – In univariate analysis, one variable is
analysed at a time.
 Bivariate Analysis – In bivariate analysis two variables are
analysed together and examined for any possible association
between them.
 Multivariate Analysis – In multivariate analysis, the concern is
to analyse more than two variables at a time.

The type of statistical techniques used for analysing univariate and

bivariate data depends upon the level of measurements of the
questions pertaining to those variables. Further, the data analysis
could be of two types, namely, descriptive and inferential.

RESEARCH CONCEPTS AND

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Descriptive vs Inferential Analysis

Descriptive analysis - Descriptive analysis deals with summary
measures relating to the sample data. The common ways of
summarizing data are by calculating average, range, standard
deviation, frequency and percentage distribution. The first thing to do
when data analysis is taken up is to describe the sample.
Examples of Descriptive Analysis:
 What is the average income of the sample?
 What is the average age of the sample?
 What is the standard deviation of ages in the sample?
 What is the standard deviation of incomes in the sample?
 What percentage of sample respondents are married?
 What is the median age of the sample respondents?
 Is there any association between the frequency of purchase of
product and income level of the consumers?

RESEARCH CONCEPTS AND

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Descriptive vs Inferential Analysis

 Is the level of job satisfaction related with the age of the
employees?
 Which TV channel is viewed by the majority of viewers in the age
group 20–30 years?
 Types of Descriptive Analysis – The table below presents the
type of descriptive analysis that is applicable under each form of
measurement.

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Descriptive vs Inferential Analysis

Inferential Analysis – Under inferential statistics, inferences are drawn on
population parameters based on sample results. The researcher tries to
generalize the results to the population based on sample results.
Examples of Inferential Analysis:
 Is the average age of the population significantly different from 35?

 Is the average income of population significantly greater than 25,000 per

month?
 Is the job satisfaction of unskilled workers significantly related with their
pay packet?
 Do the users and non-users of a brand vary significantly with respect to
age?
 Is the growth in the sales of the company statistically significant?

RESEARCH CONCEPTS AND

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Descriptive Analysis of Univariate Data

Measures of Central Tendency

Arithmetic mean (appropriate for Interval and

Ratio scale data)
Median (appropriate for Ordinal, Interval and
Ratio scale data)
Mode (appropriate for Ordinal, Interval and Ratio
scale data)

RESEARCH CONCEPTS AND

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Descriptive Analysis of Univariate Data

Measures of Dispersion

Range (appropriate for Interval and Ratio scale

data)
Variance and Standard Deviation (appropriate for
interval and ratio scale data)
Coefficient of variation (appropriate for Ratio
scale data)
Relative and absolute frequencies (appropriate
for Nominal scale data)

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More on Analysis of Data

 The researcher could create new variables by re-specifying the
data with numeric or logical transformation. Suppose a multiple-
item Likert scale designed to measure the perception of a
customer towards the bank has 10 items. The total score of a
respondent can be computed as:

Total score of ith respondent = Score of ith respondent on item 1

+ Score of ith respondent on item 2 + ... + Score of ith respondent
on item 10.

Once the total score for each of the respondent is computed, the
average score can be obtained by dividing it by the number of
items. It can be further categorized as favourable, neutral and
unfavourable perception that could be related to various
demographic variables depending upon the objectives of
research.

RESEARCH CONCEPTS AND

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What is ANOVA?
 The test of hypothesis concerning the equality of two
population means makes use of both the Z and t tests.
 However, if there are more than two populations, the
test for the equality of means could be carried out by
considering two populations at a time. This would be a
very cumbersome procedure.
 One easy way out could be to use the analysis of
variance (ANOVA) technique. The technique helps in
performing this test in one go and, therefore, is
considered to be important technique of analysis for
the researcher.

RESEARCH CONCEPTS AND

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What is ANOVA?
 The basic principle underlying the technique is that the total
variation in the dependent variable is broken into two parts—one
which can be attributed to some specific causes and the other that
may be attributed to chance.
 The one which is attributed to the specific causes is called the
variation between samples and the one which is attributed to
chance is termed as the variation within samples.
 Therefore, in ANOVA, the total variance may be decomposed into
various components corresponding to the sources of the variation.
 For eg. the sales of chairs could differ because of the various
styles and sizes of stores selling them. The average telephone
bill of the households could be different because they belong to
different income groups and so on.

RESEARCH CONCEPTS AND

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What is ANOVA?
In ANOVA, the dependent variable in question is
metric (interval or ratio scale), whereas the
independent variables are categorical (nominal
scale).
If there is one independent variable (one factor)
divided into various categories, we have one-way
or one-factor analysis of variance.
In the two-way or two-factor analysis of variance,
two factors each divided into the various
categories are involved.

RESEARCH CONCEPTS AND

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What is Cluster analysis?

Cluster analysis is a techniques for grouping objects,
cases, entities on the basis of multiple variables. The
advantage of the technique is that it is applicable to
both metric and non-metric data.

Secondly, the grouping can be done post hoc , i.e. after

the primary data survey is over. The technique has wide
applications in all branches of management . However,
it is most often used for market segmentation analysis.
RESEARCH CONCEPTS AND
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Cluster analysis- basic tenets

Can be used to cluster objects, individuals and entities

Similarity is based on multiple variables

Measures proximity between study variables

Groups that are grouped in one cluster are

homogenous as compared to others

Can be conducted on metric, non-metric as well as

mixed data
RESEARCH CONCEPTS AND
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Usage of cluster analysis

Market segmentation – customers/potential customers can

be split into smaller more homogenous groups by using

the method.
Segmenting industries – the same grouping principle can

be applied for industrial consumers.

Segmenting markets – cities or regions with similar or

common traits can be grouped on the basis of climatic or

socio-economic conditions.

RESEARCH CONCEPTS AND

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Usage of cluster analysis

Career planning and training analysis – for human

resource planning people can be grouped into clusters on
the basis of their educational/experience or aptitude and
aspirations.

Segmenting financial sector/instruments – different factors

like raw material cost, financial allocations, seasonality and
other factors are being used to group sectors together to
understand the growth and performance of a group of
industries.

RESEARCH CONCEPTS AND

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Introduction to Factor Analysis

 Factor analysis is a multivariate statistical technique in which
there is no distinction between dependent and independent
variables.
 In factor analysis, all variables under investigation are analysed
together to extract the underlined factors.
 Factor analysis is a data reduction method.
 It is a very useful method to reduce a large number of variables
resulting in data complexity to a few manageable factors.
 These factors explain most part of the variations of the original
set of data.
 A factor is a linear combination of variables.
 It is a construct that is not directly observable but that needs to
be inferred from the input variables.
 The factors are statistically independent.

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Uses of Factor Analysis

 Scale construction: Factor analysis could be used to develop
concise multiple item scales for measuring various constructs.
 Establish antecedents: This method reduces multiple input
variables into grouped factors. Thus, the independent variables
can be grouped into broad factors.
 Psychographic profiling: Different independent variables are
grouped to measure independent factors. These are then used
for identifying personality types.
 Segmentation analysis: Factor analysis could also be used for
segmentation. For example, there could be different sets of two-
wheelers-customers owning two-wheelers because of different
importance they give to factors like prestige, economy
consideration and functional features.

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Uses of Factor Analysis

 Marketing studies: The technique has extensive use in the field
of marketing and can be successfully used for new product
development; product acceptance research, developing of
advertising copy, pricing studies and for branding studies.

For example we can use it to:

• identify the attributes of brands that influence consumers’

choice;

• get an insight into the media habits of various consumers;

• identify the characteristics of price-sensitive customers.

RESEARCH CONCEPTS AND

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Conditions for a Factor Analysis

Exercise
The following conditions must be ensured before executing the
technique:
 Factor analysis exercise requires metric data. This means the data
should be either interval or ratio scale in nature.
 The variables for factor analysis are identified through exploratory
research which may be conducted by reviewing the literature on the
subject, researches carried out already in this area, by informal
interviews of knowledgeable persons, qualitative analysis like focus
group discussions held with a small sample of the respondent
population, analysis of case studies and judgement of the researcher.
 As the responses to different statements are obtained through different
scales, all the responses need to be standardized. The standardization
helps in comparison of different responses from such scales.

RESEARCH CONCEPTS AND

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Conditions for a Factor Analysis

Exercise
 The size of the sample respondents should be at least four to five
times more than the number of variables (number of statements).
 The basic principle behind the application of factor analysis is
that the initial set of variables should be highly correlated. If the
correlation coefficients between all the variables are small, factor
analysis may not be an appropriate technique.
 The significance of correlation matrix is tested using Bartlett’s test
of sphericity. The hypothesis to be tested is
H0 : Correlation matrix is insignificant, i.e., correlation matrix is an
identity matrix where diagonal elements are one and off
diagonal elements are zero.
H1 : Correlation matrix is significant.

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Applications of Factor Analysis in

other Multivariate Techniques
1. Multiple regression – Factor scores can be used in place of independent
variables in a multiple regression estimation. This way we can overcome the
problem of multicollinearity.
2. Simplifying the discrimination solution – A number of independent
variables in a discriminant model can be replaced by a set of manageable
factors before estimation.
3. Simplifying the cluster analysis solution - To make the data manageable,
the variables selected for clustering can be reduced to a more manageable
number using a factor analysis and the obtained factor scores can then be
used to cluster the objects/cases under study.
4. Perceptual mapping in multidimensional scaling - Factor analysis that
results in factors can be used as dimensions with the factor scores as the
coordinates to develop attribute-based perceptual maps where one is able to
comprehend the placement of brands or products according to the identified
factors under study.

RESEARCH CONCEPTS AND